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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 165.07-1.0%Nov 18 3:59 PM EST

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To: Stock Farmer who wrote (119006)5/20/2002 11:36:24 AM
From: Peter J Hudson  Read Replies (1) of 152472
 
John,

On one hand you want to use "THINK LIKE AN OWNER" accounting. <<The way he gets wealthier or poorer is if the actual assets he owns gain or lose in value.>> But then on the other hand you want to use the "ponzi scheme" market valuation method to determine cost to shareholders.

If we are to calculate cost to shareholders by using the market price at time of exercise, the calculation must be -- (market price immediately prior to exercise minus market price immediately after exercise.) all of the dilution happens at exercise, if there is no reduction in market price associated with this dilution there is no cost to existing shareholders.

You need to stick to using "percentage of asset " valuation or market valuation. You switch between the two.
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